Get yourself a Cast Iron stomach

Mr. and Ms. CIO, over the next couple of years you will need a strong constitution as one after another of your big, “strategic” vendors line up to make acquisitions “in the cloud”. They have plenty of cash to do so. It’s your money. You fattened them.

The 25 biggest buyers make up less than 5% of the annual global technology and telecom spend. In contrast, the biggest 25 vendors make up almost 60% of that spend. Your desire for “easier” vendor management and your desire to not look bad when a smaller vendor goes out of business has created the mismatch. IT has always been about leading edge and risk, but you wanted little-risk and you wanted to not get your hands dirty with integration. Congratulations – you got it. These vendors are sitting on hundreds of billions of cash they charged you lock-in prices for. And are about to buy smaller cloud vendors they steadfastly warned you for years were bad for your security and your health.

So, there will be plenty of times you will feel wretched when those vendors want it both ways – when they make a small, spray-paint acquisition in one area, and continue with the old business model in many others. “Clouds are fine for our software unit, but not for our outsourcing” or “They are fine for our smaller customers, but not for our larger ones.”

Up to you though. Keep going with safe, “spray painted” choices or encourage the smaller pioneers. There are plenty of choices for you to look at. Jeff Kaplan has his SaaS Showplace. Timothy Chou has the Cloudbook directory. Appirio has its Cloud Computing Ecosystem Map. Talk to them – if nothing else they will remind you as Zach Nelson did during NetSuite’s earnings call yesterday, how far behind the “safe” vendors are.

Oh, by the way, watch out as the bigger vendors expand their vocabulary and use words like “puce” as they pooh-pooh the pioneers.

Comments

Get yourself a Cast Iron stomach

Mr. and Ms. CIO, over the next couple of years you will need a strong constitution as one after another of your big, “strategic” vendors line up to make acquisitions “in the cloud”. They have plenty of cash to do so. It’s your money. You fattened them.

The 25 biggest buyers make up less than 5% of the annual global technology and telecom spend. In contrast, the biggest 25 vendors make up almost 60% of that spend. Your desire for “easier” vendor management and your desire to not look bad when a smaller vendor goes out of business has created the mismatch. IT has always been about leading edge and risk, but you wanted little-risk and you wanted to not get your hands dirty with integration. Congratulations – you got it. These vendors are sitting on hundreds of billions of cash they charged you lock-in prices for. And are about to buy smaller cloud vendors they steadfastly warned you for years were bad for your security and your health.

So, there will be plenty of times you will feel wretched when those vendors want it both ways – when they make a small, spray-paint acquisition in one area, and continue with the old business model in many others. “Clouds are fine for our software unit, but not for our outsourcing” or “They are fine for our smaller customers, but not for our larger ones.”

Up to you though. Keep going with safe, “spray painted” choices or encourage the smaller pioneers. There are plenty of choices for you to look at. Jeff Kaplan has his SaaS Showplace. Timothy Chou has the Cloudbook directory. Appirio has its Cloud Computing Ecosystem Map. Talk to them – if nothing else they will remind you as Zach Nelson did during NetSuite’s earnings call yesterday, how far behind the “safe” vendors are.

Oh, by the way, watch out as the bigger vendors expand their vocabulary and use words like “puce” as they pooh-pooh the pioneers.